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City National profit jumps

July 22, 2010 | 4:51
pm

Recovering from the grip of the financial crisis, City National Corp. said its quarterly profit jumped sixfold, helped by strong growth in deposits and improving credit quality.

City National is the parent of Southern California's largest bank, with $21.2 billion in assets and a large wealth management business. The Los Angeles company said in a report Thursday afternoon that it earned $41.3 million, or 78 cents a share, in the second quarter.

That compared with $6.8 million, or 2 cents a share, in the same period a year earlier, when the bank still was paying dividends on a $400-million U.S. Treasury Department investment made during the economic free-fall of 2008. City National has since repaid the government in full.

Second-quarter revenue totaled $304.5 million, up 39% from the second quarter of 2009. Deposits were up 26% at $17.6 billion. Dud loans and other nonperforming assets on the books totaled $314.6 million, down from $396.3 million a year earlier.

The results included several unusual items related to the company's three recent acquisitions of failed banks and the favorable settlement of tax litigation.

Excluding those items, second-quarter net income totaled 56 cents a share. Analysts on average had expected earnings of 49 cents a share.

The earnings were announced after the close of trading on a day in which City National shares gained $2.12 to $53.